IP/11/24
Brussels, 12 January 2011
State aid: Commission approves € 25.3 million French aid for the construction of a geothermal boiler
The European Commission has authorised France under EU state aid rules to provide a €25.3 million grant for the construction of a heat boiler using a renewable energy source (geothermal energy) in the Alsace region. The aid will be granted to a joint-venture between Roquette Frères, Electricité de Strasbourg and Caisse des Dépôts et Consignations. The joint-venture will sell the produced geothermal heat to the industrial site operated by Roquette Frères in Beinheim, enabling the company to partly replace its existing gas-fired heating boilers. The Commission concluded that the aid is in line with EU state aid rules, because on balance, the positive effects of the measure outweigh the potential distortions of competition and of trade between Member States.
Commission Vice-President in charge of competition policy Joaquín Almunia said: "This geothermal project complements the already approved Beinheim biomass project and will also contribute to reaching the EU 2020 environmental objectives without unduly distorting competition. It will further demonstrate that geothermal heat, an innovative renewable technology, can be deployed at commercial scale."
The Commission has approved a €25.3 million French aid for the construction of a 24 mega watt (MW) geothermal boiler in Beinheim, in the Alsace region, by a joint venture between Roquette Frères, a Belgium company, Electricité de Strasbourg and Caisse des Dépôts et Consignations. The project also involves the construction of a 15-kilometer pipeline to bring the heat from the underground geothermal source to the Beinheim site. The use of geothermal energy, a renewable energy source, will result in a reduction of CO2 emissions by 39,000 tonnes a year compared to the same volume of heat produced from natural gas. More generally, it will encourage the diffusion of the geothermal technology at commercial scale and participate in reducing the CO2 abatement costs over the coming years, while contributing to reaching the renewable production objectives.
The project will ultimately reduce the company's operating costs since geothermal energy is a free primary energy source, but it implies a significant initial investment of €45.3 million in the boiler and network.
The development of renewable energy is part of the climate and energy package designed for reaching the EU 2020 environmental objectives. The Commission concluded that the French measure is an appropriate and proportionate measure necessary to achieve an objective of EU interest. In particular, the Commission found that the aid is proportionate in view of the risks for the investment related to the current and future gas and CO2 prices.
Furthermore, the Commission considered that the distortions of competition and the effect on trade were limited and that, on balance, the positive effects of the measure outweigh the potential negative effects on competition and trade between Member States.
A separate €11 million aid to Roquette Frères for the construction of a biomass boiler in Beinheim was approved by the Commission on 17 November 2010 (see IP 10/1517). The biomass and geothermal projects are different and involve separate costs and aid amounts.
The non-confidential version of the decision will be made available under the case number N 715/2009 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.
